It’s time for a sigh of relief — you applied and were approved for an IRS payment plan. Now, it’s up to you to abide by the terms of that agreement. Failure to do so could lead to additional fees or other harsh consequences. The following are five of the easiest ways to destroy your payment plan:
- Fail to Make Payments or Make Late Payments
This may seem like an obvious mistake, and yet, it’s the most common means of IRS plan failure. Once you agree to a plan, it is absolutely imperative that you stick to it — or alert the IRS promptly if this is not possible.
- Bounce Checks
When in doubt, it’s best to set up automatic payments via direct deposit. Paying by check is possible, but take care to maintain a sufficient balance in your account — a bounced check could lead to a world of trouble.
- Pay Less Than the Required Installment
A low payment is better than no payment at all, right? Not necessarily — if you intend to pay less than the previously agreed upon amount, you’ll first need to apply with the IRS to restructure or reinstate your plan.
- File Tax Returns Late — Or Not At All
As you make required installments, continue to file all tax returns accurately and on time. Failure to do so could compromise your installment plan eligibility.
- Move Without Alerting the IRS to Your New Address
If you move while maintaining an installment plan, you’ll need to complete Form 8822. This document informs the IRS of your new address.
Whether you’re struggling to set up a new installment plan or desperate to avoid default, you can benefit from a consultation with the Highland Tax Group. Call 720-398-6088 today to learn more about available IRS installment options.